PbR Alert

Why is accurate patient level cost collection for supplies and drugs the essential tool in the PbR jungle?

HRG4 is coming. Instead of four or five hundred cost classifications, there will be fourteen hundred as procedures are unbundled and diagnosis/OPCS codes are broken down in more detail.

PbR tariffs are calculated based on averaged reference data and in many cases will not properly reflect actual costs. Added to this, under HRG 4 the correct coding of patients will become more critical because a slight change in interpretation of patient notes during coding could create a significant underor over-claim on a tariff.

Trusts also often do not know which PbR tariffs are profitable for them. There may even be significant variations in a procedures cost depending upon the consultant or theatre doing it.

Accurate cost collection at point of use is the essential tool to deal with all this uncertainty.

The costs per patient for both drugs and supplies in Omnicell are a complete history of the patient spell in hospital and can be routinely exported, classified and compared with the PbR claims against them.

This will identify several things:

Has the patient been classified correctly?

Is the Trust efficient at this particular procedure/diagnosis?

Are particular clinical/consultants methods uneconomic?

Is the tariff wrong?

Are consumables being purchased at too high a price?

Have high cost drugs outside of the tariff been identified and claimed separately?

Have miscellaneous outpatient and A&E costs been claimed?

Routine cost collection for comparison against revenues is an absolutely standard business tool used by well-run businesses as diverse as construction, process engineering and manufacturing. Without job or project costs, businesses that run on narrow margins cannot hope to remain in surplus for long. This is what patient level costing effectively means.

The NHS has moved into a situation where it is being handed fixed prices for its activities by government. To maximise its net revenues Trusts need to use Omnicells control and data generation to identify their strengths and weaknesses.

At a national level, accurate cost collection will lead to better reference costs, fairer tariffs and a better understanding of where exceptions need to be made for specialist treatments. At a Trust level, Omnicell gives you a fast route to proper reference cost submissions, which will help inform the tariff.